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While headlines are currently buzzing with the SBA’s administrative crackdown on 111,000 borrowers, the judicial system is quietly closing the book on some of the largest pandemic fraud rings in the country. The latest case out of the Middle District of Pennsylvania serves as a stark reminder: The "pay and chase" era has shifted entirely into the "catch and convict" era. On February 10, 2026, the fourth and final defendant was sentenced in a massive scheme that siphoned over  $11.5 million  from the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) program. Here is the breakdown of what happened and what it means for the industry. The Scheme: 120 Applications, 18 "Ghost" Businesses This wasn't just a one-off mistake; it was a sophisticated, multi-year conspiracy led by Creed White (67) and his son, Joshua White (44). The Hub:  The fraud centered around a legitimate smelting business, but quickly spiraled into the creation of 18 dormant businesses  that had no operations, no employees, and no purpose other than to act as "shells" for federal funds. The Method:  The group submitted approximately 120 fraudulent applications . They used a mix of knowing and unwitting individuals' identities to claim ownership of these shell companies. The Paper Trail:  To get past bank lenders, employees of the smelting company were tasked with creating fake tax records, banking statements, and business filings  to give the "ghost" companies a thin veneer of legitimacy. The Consequences: Prison and Restitution The court did not go easy on the conspirators. The sentences handed down reflect the federal government's commitment to treating pandemic fraud as a high-level financial crime. Creed White (Leader):  Sentenced to 10 years  in federal prison. Joshua White (Son):  Sentenced to 8 years (96 months)  for bank fraud. Joseph Bailey (Employee):  Sentenced to 46 months  for his role in forging documents. Kester Murray (Employee):  Sentenced to two years of probation. In addition to prison time, the court ordered millions of dollars in restitution . Joshua White, specifically, was ordered to pay back over $2.3 million, a debt that will follow him long after his release.

As the new year dawns a new era of compliance begins. Y ou might be aware of regulations for the commercial finance industry that have been talked about, passed, and will likely have an effect on you, but which ones will go into effect starting the new year? Below we will highlight some of the key laws and provisions that will go into effect on Jan 1, 2024, and if you haven't already made preparations for these you are behind the eight ball. However, there is still time. You should contact your legal counsel for any advice on the below. New laws/provisions Georgia and Florida both have disclosure laws that go into effect Jan 1. Under the new law, funding providers will be obligated to provide borrowers with specific information, including the total amount of funds provided and the cost of capital. Georgia and Florida brokers will be banned from charging an 'advance fee' before successfully obtaining financing for a merchant. 'Advance fee' means any consideration that is assessed or collected prior to the closing of a commercial financing transaction by a broker. In Florida,  brokers will be required to disclose their address and telephone number in all advertisements promoting their services, enhancing transparency and ensuring businesses can make informed decisions. For Georgia, no broker shall "make or use any false or misleading representations or omit any material fact in the offer or sale of the services of a broker or engage, directly or indirectly, in any act that operates or would operate as fraud or deception upon any person in connection with the offer or sale of the services of a broker." Violating these provisions can result in fines starting at $500 per violation in the same transaction levied by the state Attorney General. California will limit fees, such as fees beyond the normal scope of an 'origination fee' or higher cost fees than what it takes to provide a service like filing a UCC. So for example, if it costs $50 to file a UCC then a funding provider cannot charge the merchant $100. In California, the APR disclosure will stay in the disclosure requirements given the win in court by the State of California recently. These are just some of the new laws so please do your own due diligence to find the laws that you need to abide by coming the new year.

SB 1482 passing in California Senate Brace yourselves because California is shaking things up in the world of commercial financing, again. The Golden State just passed a bill in the State Senate and will move on to the Assembly. If it continues to be passed as is, it will make waves across the industry. The Lowdown Senate Bill 1482 sailed through the Senate with a unanimous vote (talk about bipartisanship!), and it's now headed to the Assembly. This bad boy aims to bring a whole new level of regulation to the commercial financing game. Here's the kicker: if this bill becomes law, providers and brokers of certain commercial financing products – think merchant cash advances, factoring, and lease financing – will have to register with the California Department of Financial Protection and Innovation (DFPI) . That's right, no more flying under the radar! Definition of “commercial financing” as defined in California Financial Code Section 22800(d), includes, among other things, closed-end and open-end loans, factoring, and accounts receivable purchase transactions (including merchant cash advances) Double Trouble? Now, here's where things get a little quirky. The bill doesn't seem to exempt companies that are already licensed under the California Financing Law (CFL). So, if you offer both CFL-regulated products and products covered by this new bill, you might have to register twice. Talk about bureaucratic redundancy! The Nitty-Gritty But wait, there's more! This registration process isn't just a formality. Applicants will have to provide detailed information about their business activities, control persons, and even submit their disclosure documents, contracts, and application flows for DFPI's review. And let's not forget the annual registration and assessment fees based on your gross income . Ouch! Article  3. Annual Assessment and Reporting 90040.  (a)  A registrant shall pay to the commissioner an annual registration fee of one hundred dollars ($100) plus an assessment equal to its pro rata share of all costs and expenses... (b) A registrant who reports in its annual report no gross income from subject products during the year or whose reported gross income from subject products results in an assessment amount of less than five hundred dollars ($500) as calculated under subdivision (a) shall pay an assessment of five hundred dollars ($500) for that year. The Bigger Picture This bill is part of a nationwide trend toward tighter regulation of commercial financing providers. California is often a trendsetter so other states might follow suit in the coming months and years but other states like Virginia already have something similar in place. Better keep an eye on those legislative developments, folks! So, there you have it – a sneak peek into California's latest move to shake up the commercial financing world. Whether you love it or hate it, one thing's for sure: SB-1482 is bound to keep things interesting.

Effective May 9, 2023, the State of Georgia has implemented a new commercial financing disclosure law, SB 90 , with the intent to modify Chapter 1 of Title 10 of the Georgia Code. SB 90 is designed to necessitate commercial financing disclosures for providers engaged in over five commercial financing transactions annually within Georgia completed on or after January 1, 2024. In an effort to elucidate the legislation, it's essential to clarify a few terminologies found within SB 90. " 'Commercial financing transaction' means a business purpose transaction: (A) Under which a person extends a business a commercial loan or a commercial open-end credit plan; or (B) That is an accounts receivable purchase transaction." An ' Advance fee ' is identified as any consideration evaluated or collected prior to the conclusion of a commercial financing transaction by a broker. Furthermore, a ' Broker ' is defined as an individual who, in expectation of compensation, organizes a commercial financing transaction between a third party and a state-based business, which would be legally binding if executed. A ' Provider ' means a person who consummates more than five commercial financing transactions in this state during any calendar year, with some other stipulations. SB 90 stipulates exemptions for federally insured financial institutions as well as transactions exceeding particular monetary thresholds . The disclosure requirements outlined in the act include the total amount of funds provided, disbursed, and paid to the provider, the total dollar cost, the manner and frequency of payments, and any prepayment costs or discounts . Additionally, the Act sets forth regulations for brokers , banning the assessment of advance fees, false or deceptive representations, and requiring third-party payments for actual services rendered. SB 90 authorizes the Attorney General to accept and respond to complaints, and provides for monetary penalties. Here is what the bill says about penalties: (h) A person who violates a provision of this Code section is subject to a civil penalty of $500.00 per violation, not to exceed $20,000.00 for all violations arising from the use of the same transaction documentation or materials. (i) A person who violates a provision of this Code section after receiving written notice of a prior violation is subject to a civil penalty of $1,000.00 per violation, not to exceed $50,000.00 for all violations arising from the use of the same transaction documentation or materials. It is our opinion that the only way to stop some of the business practices in the commercial financing space is to enforce monetary penalties so this will be impactful on the industry. Even though the Governor had until May 8th to veto the law, his signature was not required for it to take effect. The bills' sponsors were: Senators Dixon of the 45th, Gooch of the 51st, Albers of the 56th, Still of the 48th, and Kennedy of the 18th. This regulatory change is expected to introduce more transparency into commercial financing transactions within the state, by making it obligatory for entities involved in such transactions to provide clear and detailed disclosures. This is seen as a significant step towards ensuring fair and equitable commercial financing practices in Georgia. https://www.legis.ga.gov/legislation/64004

Florida Governor Ron DeSantis (R) has recently signed a Florida Commercial Financing Disclosure Law (FCFDL), Florida HB 1353 , into law, marking a significant development in the regulation of commercial financing. This legislation, which is set to take effect by January 1, 2024 , aims to enhance transparency and provide greater protection for borrowers engaging in commercial financing transactions within the state. The Florida law focuses on " commercial financing transactions ," encompassing various types such as commercial loans, commercial open-end credit plans, and accounts receivable purchase transactions. Notably, the law applies solely to transactions involving $500,000 or less , while certain financial institutions are exempt from its provisions. One of the key aspects of this legislation is the introduction of disclosure requirements for lenders . Under the new law, lenders will be obligated to provide borrowers with specific information, including the total amount of funds provided and the cost of capital. Unlike traditional lending practices, the law does not require lenders to disclose the Annual Percentage Rate (APR) , a calculation that has been a subject of controversy within the industry. One group that has influenced this law and similar laws in other states is the RBFC (Revenue Based Finance Coalition). The Florida law also places certain obligations on brokers operating in the commercial financing space. It prohibits brokers from collecting advance fees from businesses, with a few exceptions, and from engaging in any false or deceptive representations. . Furthermore, brokers will be required to disclose their address and telephone number in all advertisements promoting their services, enhancing transparency and ensuring businesses can make informed decisions. One thing it does not require is for brokers to register or pay any fees annually, as other states have required . The enactment of this legislation in Florida signifies a significant step forward in the regulation of commercial financing within the state. By providing borrowers with essential information and safeguards, the law aims to create a more equitable and transparent lending environment. The Florida commercial financing disclosure law represents a growing trend in states recognizing the importance of transparency and borrower protection in commercial financing transactions. By addressing key disclosure elements and introducing obligations for brokers, the law seeks to foster fair and responsible lending practices. As other states continue to assess their commercial finance regulations, Florida's enactment of this legislation sets a precedent for ensuring greater accountability and transparency in the industry.

The commercial finance industry is at a pivotal juncture, with the sector undergoing significant regulatory changes. These changes have begun to reshape conventional business practices. Some businesses have chosen to abstain from funding in specific states, while others have embraced the challenge head-on, ensuring full compliance across the board. We have already witnessed the enactment of commercial financing disclosure laws in various states. The most recent addition is Georgia , with Florida on the cusp of joining, provided there are no unexpected obstacles. Numerous other states are currently deliberating similar bills in their respective legislative bodies. One organization at the forefront of these regulatory changes is the Revenue-Based Finance Coalition (RBFC). Their role in shaping sensible legislation and counteracting detrimental laws has been crucial. The RBFC continues to wield significant influence over existing laws while dedicating resources to prospective legislation. We are presently witnessing a transformation that has been anticipated within the alternative business lending industry for many years. While now it's classified under commercial finance, the product often known as 'merchant cash advance' carries diverse names in state laws - such as sales-based or revenue-based financing. Assuming the current trajectory continues, companies in this industry will operate quite differently five years from now. It's worth noting that the potential advantages should surpass the disadvantages. Companies with a long-term outlook will adapt accordingly, while those driven by short-term gains may eventually find themselves struggling to keep pace. One essential aspect that both funders and brokers need to prepare for is the heightened emphasis on compliance. As more states establish unique laws - say, 20 or more - keeping abreast of varying requirements will be a daunting task. This scenario will inevitably raise the barriers to entry and increase operational costs for existing funding companies and Independent Sales Organizations (ISOs). In essence, now is the time for action. It's imperative that you make adequate financial and operational preparations for these changes if you haven't done so already.

Missouri becomes the latest state to put new commercial financing laws into place. Governor Mike Parson signed SB1359 on July 11th, an act that "modifies provisions relating to financial institutions". The bill includes the commercial financing disclosure law that is similar to other state laws that have recently passed such as in Connecticut, Virginia, and Florida. Brokers will need to register with the state. There is no APR disclosure. The Revenue Based Finance Coalition led efforts into crafting this bill and working with legislators to get to this point. The following are other details: COMMERCIAL FINANCING DISCLOSURE LAW (Section 427.300) This act creates the "Commercial Financing Disclosure Law". Under this act, any person who consummates more than 5 commercial financing transactions, as defined in the act, to a business located in this state in a calendar year is required to make certain disclosures to the business about the transaction. Specifically, the provider is required to disclose the following: • The total amount of funds provided to the business under the terms of the commercial financing transaction; • The total amount of funds disbursed to the business under the terms of the commercial financing transaction, if less than the total amount of funds provided, as a result of any fees deducted or withheld at disbursement and any amount paid to a third party on behalf of the business; • The total amount to be paid to the provider pursuant to the commercial financing transaction agreement; • The total dollar cost of the commercial financing transaction under the terms of the agreement, derived by subtracting the total amount of funds provided from the total of payments; • The manner, frequency and amount of each payment; and • A statement of whether there are any costs or discounts associated with prepayment of the commercial financing transaction including a reference to the paragraph in the agreement that creates the contractual rights of the parties related to prepayment. The act requires registration with the Division of Finance prior to engaging in business as a broker for commercial financing. Specifically, the act requires filing a registration form, submitting a fee of $100, and obtaining a surety bond in the amount of $10,000. A registration renewal is required every year, not later than January 31st. Violations of these provisions are punishable by a fine of $500 per incident, not to exceed $20,000 for all aggregated violations. Any person who violates any provision of this act after receiving written notice of a prior violation from the Attorney General shall be punishable by a fine of $1,000 per incident, not to exceed $50,000 for all aggregated violations arising from the use of the transaction documentation or materials found to be in violation of this act. Violation of any provision of these provisions does not affect the enforceability or validity of the underlying agreement. This act does not create a private cause of action against any person or entity based upon noncompliance with this act. The Attorney General is given exclusive authority to enforce these provisions. These provisions contain various exemptions. For example, transactions of more than $500,000 are exempt. The registration and disclosure requirements of these provisions take effect either (1) 6 months after the Division of Finance finalizes promulgating rules, if the Division intends to promulgate rules; or (2) February 28, 2025 , if the Division does not intend to promulgate rule. Read SB1359

On Saturday, June 21, 2025 , Texas Governor  Greg Abbott signed House Bill 700  into law, setting the stage for a significant regulatory shift in how sales-based financing, including merchant cash advances (MCAs), can be offered in the state. Effective September 1, 2025 , the new law adds Chapter 398  to the Texas Finance Code and applies to any provider or broker  offering commercial sales-based financing to Texas businesses. The move places Texas among the growing list of states introducing legislation to bring transparency, oversight, and consumer protection to alternative financing models that have long operated in legal gray areas. Key Provisions of HB 700 Under the new law, funders and brokers must comply with a series of disclosure, registration, and practice restrictions for funding amounts below $1 million. Required Actions for Funders & Brokers: Register  with the Office of Consumer Credit Commissioner (OCCC)  by December 31, 2026 Provide standardized disclosures  including: Total financing amount Amount disbursed Finance charges Total repayment obligation Payment structure (fixed or variable) Repayment term Estimated monthly payments Any applicable fees Broker compensation Prepayment penalties or incentives Obtain a signed disclosure acknowledgment  from the recipient Prohibited clauses : No confessions of judgment No automatic account debits  with few exceptions EXEMPTIONS From the law: "This chapter does not apply to a provider or broker that is: (1) a bank, out-of-state bank, bank holding company, credit union, federal credit union, out-of-state credit union, or any subsidiary or affiliate of those financial institutions"; Violators face civil penalties up to $10,000 per violation , with enforcement powers held by the Texas OCCC. Auto-Debits and the Security Interest Challenge Among HB 700’s most significant, and potentially disruptive, features is its restriction on automated debiting of a business’s bank account  unless the funder holds a first-priority, perfected security interest  in the account. This condition goes far beyond a simple UCC filing. In practice, securing such a position is rare, complex, and may even be resisted by borrowers or financial institutions. What Counts as a “Validly Perfected Security Interest”? A generic UCC-1 filing likely won’t suffice. To meet this standard, funders may need: A specific security agreement  naming the business deposit account A control agreement  (DACA) with the bank holding the account UCC filing aligned with Article 9 standards for perfection by control Without these, auto-debiting is prohibited , effectively banning one of the industry’s most common repayment methods unless providers restructure their collateral practices. What Comes Next: Navigating Legal Workarounds HB 700 doesn’t outlaw revenue-based financing; it regulates how it's structured and disclosed. That leaves room for compliant innovation. Strategic Options for Funders: Collateralize receivables or equipment  to maintain a secured status without needing control of deposit accounts Shift to invoice factoring or other loan models , which are explicitly exempt under HB 700 Move toward manual payment systems , even if less efficient Explore lockbox-style arrangements  with banking partners, where permissible Partner with traditional lenders and banks  to develop hybrid solutions meeting regulatory thresholds Bottom Line Texas HB 700 isn't just a regulatory update, it's a redefinition of how sales-based financing must be conducted in one of the country’s largest markets. For brokers and funders, the message is clear: disclose, register, and restructure . This will take significant resources. The coming months will be critical. Those who begin compliance planning early, especially around security interests and payment systems, will not only avoid penalties but may also position themselves as trustworthy players in a newly regulated landscape. Some Current State Regulation Comparisons Feature Texas (HB 700) New York (S5470B) California (SB 1235) Connecticut (SB 1032) Virginia (HB 1027) Effective Date Sept 1, 2025 Jan 1, 2022 Jan 1, 2023 July 1, 2024 July 1, 2022 Disclosure Threshold < $1M < $2.5 M < $500K < $250K All sales-based financing Broker Compensation Disclosure Required Required Required Required Required Registration Required ✅ Yes (OCCC) ❌ Not required ❌ Not required ✅ Yes ✅ Yes Confession of Judgment Ban ✅ Yes ✅ Yes ✅ Yes ✅ Yes ✅ Yes Auto-Debit Restrictions ✅ Conditional ❌ Not addressed ❌ Not addressed ❌ Not addressed ❌ Not addressed Enforcement OCCC, $10K per violation NY DFS, varies CA DFPI, varies CT Banking Dept VA SCC, $1,000 initial + $500 annual fines Private Right of Action ❌ None ✅ Yes ❌ None ✅ Yes ❌ None Rulemaking Authority TX Finance Commission NY DFS CA DFPI CT Banking Dept VA SCC

The Small Business Administration (SBA), under Administrator Kelly Loeffler, announced the suspension of 111,620 California-based borrowers . The move targets roughly $8.6 billion  in loans from the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) program, citing a massive failure in oversight. While the number of suspensions is staggering, the narrative surrounding the announcement, which was similar to the Minnesota crackdown announcement, specifically the claim that the previous administration "tolerated" this corruption, requires a rigorous look at the facts. The Claim: A "Biden-Era" Culture of Corruption The SBA’s recent press release characterizes the current discovery of fraud as a byproduct of the Biden administration's inaction. Administrator Loeffler stated that these suspensions "illuminate the scale of corruption that the Biden Administration tolerated for years." The Reality: A Multi-Year Prosecution Effort The legislative and judicial records contradict the assertion that the Biden administration was passive regarding fraud. The 10-Year Statute of Limitations:  In August 2022, President Biden signed two bipartisan bills—the PPP Inflation Recovery Act  and the COVID-19 EIDL Fraud Statute of Limitations Act . These laws specifically extended the time to prosecute fraud from five years to ten years , ensuring that the "pay and chase" efforts could continue well into the 2030s. The Fraud Task Force:  In May 2021, the DOJ established the COVID-19 Fraud Enforcement Task Force . By early 2024, this task force had already charged over 3,500 defendants  and seized more than $1.4 billion  in stolen funds. The Claim: These Programs Were a "Biden-Era" Issue The current SBA narrative frames the programs as if they were built and managed under a single partisan watch. The Reality: The "Guardrails Down" Launch of 2020 To understand the fraud, one must look at the birth of the programs: The Trump-Era Launch:  Both the PPP and EIDL programs were created and launched in March 2020  under the Trump administration to provide immediate relief during the initial lockdowns. Speed Over Security:  To get money out the door, the initial program designs intentionally lowered guardrails. The SBA Office of Inspector General (OIG) testified that the decision to "streamline" applications led to a "pay and chase" environment. Most of the suspicious activity being flagged today originated from applications submitted during the high-volume rush of 2020 and early 2021. The Claim: California’s "Welfare Culture" Is to Blame The SBA press release links the high volume of fraud in California to the state’s "unaccountable welfare policies." The Reality: Geography and Scale Population Proportionality:  California is the most populous state in the union and has the highest concentration of small businesses in the country. Statistically, any federal program, fraudulent or otherwise, will show its highest raw numbers in California, Texas, and Florida. Federal Authority:  PPP and EIDL were federal programs  governed by federal rules. State-level welfare policies had zero impact on the eligibility requirements or the vetting process of these SBA loans. SBA Claim (Feb 2026) Historical Fact Biden administration "tolerated" fraud. Biden signed laws extending  the time to prosecute fraud to 10 years. This is a "Biden-era" corruption issue. Programs were designed and launched in 2020 with "weakened controls" to ensure speed. The $8.6B is a new discovery. This is the result of years of data-crunching by the OIG and DOJ task forces. Fraud is due to California's "welfare culture." Fraud was a national issue driven by the "pay and chase" structure of federal legislation. Verdict: Data Meets Politics The suspension of 111,000 borrowers is a massive administrative action, but it is not a "new" discovery of ignored fraud. Rather, it is the culmination of years of data-crunching by the SBA OIG  and the Pandemic Response Accountability Committee (PRAC) , agencies that were fully funded and active throughout the last four years. The Bottom Line:  While the current SBA is right to continue the "crackdown" on those who defrauded the system, claiming the previous administration "tolerated" the fraud ignores the very laws and task forces that made today’s recoveries possible. The industry deserves transparency, but it also deserves the full history.

By the time Kris Roglieri learns the number of years in prison he will serve, it will have been almost four months after he pleaded guilty in federal court to one count of Conspiracy to Commit Wire Fraud. This is according to court records that reveal that the Deputy Attorney General of the Justice Department,  Todd Blanche , recently submitted a request to adjourn the sentencing until April 3rd . U.S. District Judge Mae A. D'Agostino granted the request shortly after. A few questions I have (as a non-attorney): 1) Why is the Deputy Attorney General making this request, since I don't recall seeing him in court records before? Is this because the dates have been postponed enough that a request from the federal prosecutor isn't enough, or is this standard operating procedure? 2) What does pushing back the sentencing by about 3 weeks change? Is it so that counsel can properly submit a sentencing memorandum? Has there been something in the presentencing report that hasn't been resolved, for example, more information about missing money? Does this have to do with the two co-conspirators, Chris Synder and Kimmy Owen (their sentencing dates are 4/16 &17, respectively)? We shall see whether, as the sentencing date for Mr. Roglieri gets closer, any new key details are released that could help him with his sentencing or even those of his co-conspirators.

The small business lending world just got a major technology upgrade. AdvanceIQ.ai announced this week the launch of its AIQ Platform, a unified intelligence system designed specifically for SMB lenders and investors in the merchant cash advance (MCA) and revenue-based finance (RBF) space. If you're involved in alternative lending, this is a development worth understanding. The Problem: Spreadsheets Are Holding Back SMB Lending Here's the reality: many SMB lenders are still managing multi-million dollar portfolios using Excel spreadsheets, disconnected tools, and static monthly reports. For an industry that's increasingly attracting institutional capital and sophisticated private credit investors, this fragmented approach creates real problems. Portfolio managers can't quickly identify which deals are performing well and which ones are deteriorating. Underwriters lack consistent risk assessment frameworks across deals. Investors struggle to get timely, transparent reporting on their capital deployment. And when problems emerge, like a cluster of defaults in a specific industry or geography, they're often discovered weeks after the damage has already spread. This isn't just inconvenient. It's expensive and risky. Enter the AIQ Platform: Three Tools, One Unified System AdvanceIQ.ai 's solution addresses these pain points through an integrated platform consisting of three core components that work together seamlessly: 1. PortIQ: Your Portfolio Command Center Think of PortIQ as your portfolio's mission control. It delivers real-time performance analytics, helping you understand not just what  is happening in your portfolio, but why  it's happening. Want to know which underwriter is approving the best-performing deals? PortIQ shows you. Need to compare how merchants in the restaurant sector are performing versus retail? It's right there. Looking to generate investor-ready quarterly reports? Done in minutes instead of days. The platform breaks down performance by originator, ISO (independent sales organization), account executive, underwriter, industry vertical, and virtually any other dimension you can think of. For syndicators managing capital from multiple investors, PortIQ generates automated Portfolio Pulse Reports, the kind of institutional-grade reporting that private credit investors expect. 2. SMB RiskIQ (SRI): Purpose-Built Risk Scoring This is where things get interesting. Unlike generic credit scores that were designed for consumer lending, SMB RiskIQ is trained specifically on merchant cash advance and revenue-based finance performance data. The difference matters. A restaurant owner with personal credit challenges might actually be an excellent MCA candidate if their business is generating consistent daily revenue. Traditional credit scores miss this nuance. SRI captures it. The system uses real underwriting attributes that MCA professionals already understand, daily revenue patterns, seasonal trends, and industry-specific benchmarks to generate risk scores that actually predict MCA performance. Early users report that this helps them filter leads more effectively, price deals more accurately, and reduce the time spent on manual underwriting. 3. ARIA: Your AI Risk Intelligence Agent Here's where AdvanceIQ.ai is pushing the envelope. ARIA acts as an intelligent layer on top of your portfolio data and risk scores, using natural language processing to surface insights you might otherwise miss. Instead of staring at dashboards trying to spot patterns, ARIA proactively flags unusual trends, summarizes portfolio-relevant news, and provides plain-English explanations of what's happening and why it matters. For example, ARIA might notify you that "Three restaurant merchants in the Chicago area have all reduced daily receipts by 20% over the past two weeks, this appears correlated with a major local event disruption" or "Your healthcare vertical is showing 15% better payment consistency compared to the portfolio average, suggesting an opportunity to increase allocation." It's like having a data analyst working 24/7 to keep you informed. Real-World Impact: What Early Users Are Saying Daniel DeMeo, CEO of Lendr, describes the platform's impact succinctly: "The combination of PortIQ and SMB RiskIQ has given our team a much clearer view into portfolio performance and deal quality. We're able to surface risk signals earlier and move faster on underwriting and portfolio decisions." That speed and clarity translate directly to competitive advantage. In an industry where being able to approve and fund a merchant in 48 hours versus 5 days can mean the difference between winning and losing a deal, faster and more confident decision-making is invaluable. Why This Matters for the Broader Fintech Ecosystem The launch of the AIQ Platform represents something bigger than just another software tool. It signals the maturation of the SMB alternative lending sector. As merchant cash advance and revenue-based financing continue to intersect with institutional private credit, the industry needs infrastructure that meets institutional standards. Investors writing $10 million checks into MCA portfolios expect the same level of risk analytics and reporting transparency they'd get from a commercial real estate or equipment leasing fund. AdvanceIQ.ai is building exactly that infrastructure, and making it accessible to originators of all sizes, not just the largest players.

In the competitive landscape of commerce platforms, the Q3 2026 earnings report from Lightspeed Commerce Inc. (NYSE: LSPD) offers a compelling look at a company successfully pivoting from pure-play software to a high-margin fintech powerhouse. While much of the market noise centers on the widened net loss, driven largely by hardware incentives, the real story for serious stakeholders is the explosive growth of Lightspeed Capital . The Engine Under the Hood: Lightspeed Capital The most striking figure in the report isn't the 11% overall revenue growth; it is the 34% year-over-year revenue surge in Lightspeed Capital.  As a financial analyst, this indicates that Lightspeed is successfully deepening its relationship with its existing merchant base. They are no longer just providing the "pipes" for commerce; they are providing the liquidity that powers it. This isn't just a side project; it is a high-margin, transaction-based growth engine that significantly improves the company’s monetization of its Gross Transaction Volume (GTV). Key Performance Metrics (Q3 2026): Lightspeed Capital Revenue:  Up 34% YoY. Merchant Cash Advances (MCA) Outstanding:  $106 million. Average Remittance Period:  Seven months. Risk Profile:  Management cited high margins and notably low default rates. Vertical Strategy: Why the Growth is Durable Lightspeed isn't just casting a wide net; they are surgically targeting high-GTV (Gross Transaction Volume) merchants in North American retail and European hospitality. This "Growth Engine" segment saw revenue grow by 21%, nearly double the company’s overall rate. By integrating lending directly into the POS ecosystem, Lightspeed has created a "sticky" environment. When a merchant takes a cash advance through Lightspeed Capital, the remittance is automated through their daily sales. This reduces friction for the merchant and significantly lowers the risk profile for Lightspeed, as they have real-time visibility into the merchant's cash flow. The Pivot to Transaction-Based Revenue We are witnessing a fundamental shift in Lightspeed’s revenue mix. Transaction-based revenue now accounts for 67.1% of total revenue , up from 64.8% a year ago. While subscription revenue remains a steady anchor (growing at 6%), the transaction side, driven by payments and capital, is where the "alpha" lies. The company's ability to maintain a 1.24% monetization rate on $25.3 billion in quarterly GTV shows that their "unified payments and capital" strategy is hitting its stride. Efficiency Markets vs. Growth Engines It is worth noting the discipline in their capital allocation. CFO Asha Bakshani highlighted that while they are investing heavily in "Growth Engines," their "Efficiency Markets" remain gross-profit positive. The strategy is clear: Use the stable cash flow from mature markets to fuel the high-growth, high-margin lending and payment sectors in North America and Europe. The Analyst’s Bottom Line Lightspeed is currently a "tale of two tapes." The GAAP Reality:  A net loss of $33.6 million as they aggressively discount hardware to buy market share. The Fintech Potential:  A second consecutive quarter of positive free cash flow ($15 million) and a lending business growing at 34%. For those focused on the alternative lending and fintech space, the takeaway is simple: Lightspeed is evolving into a formidable lender. With $479 million in cash and a growing appetite for merchant capital, they are well-positioned to capture more "wallet share" from their 148,000+ customer locations. The widened net loss is a temporary byproduct of a land-grab strategy; the 34% growth in Capital is the durable signal of a maturing, profitable financial services ecosystem. Strategic Outlook:  With the fiscal 2026 outlook raised and the capital business proving to be a high-margin, low-default winner, Lightspeed is moving beyond the "SaaS" label and firmly into the "Fintech" category. Watch for the continued expansion of the MCA portfolio as a primary driver of EBITDA growth in 2027.